CHICAGO — A federal appeals panel has determined federal court isn’t the proper venue for a class action lawsuit alleging Best Buy misled consumers who bought Geek Squad repair warranty plans to protect their big screen TV purchases.
Legal action began when Tawanna and Anthony Ware claimed Best Buy violated the Magnuson-Moss Warranty Act. According to the complaint, Best Buy sold them a five-year service package when they purchased a new big plasma screen television in 2013. However, they alleged Best Buy failed to identify the Geek Squad protection plan as a full or limited warranty and then, when Geek Squad couldn't fix their TV, did not allow them to choose how to remedy the problem.
According to various court filings, the Wares’ plasma TV failed in May 2017, after which Samsung had stopped making replacement parts. Best Buy provided the Wares a gift card aligned with current market prices for a comparable model.
The Wares originally filed their claim in Florida. After multiple amended complaints, the Florida court dismissed the claim for lack of jurisdiction. That led to filing a similar suit in Illinois. In May 2018, Best Buy’s attorney Martin G. Durkin, of Holland & Knight, moved to have the complaint dismissed. In January 2019, Judge Sharon Johnson Coleman granted that request.
The Wares then filed a federal class action, alleging Samsung violated the Illinois Consumer Fraud and Deceptive Business Practices Act, which U.S. District Judge Mary Rowland dismissed in March 2020. Rowland said the Wares failed to show how Samsung violated public policy or was oppressive when it sold TVs “without adequate product life cycle management procedures in place.”
In an opinion issued July 29, the U.S. Seventh Circuit Court of Appeals said the core issue on appeal, similar to that of Coleman’s dismissal, was the question of whether an extended service contract meets the legal definition of a written warranty. The Wares didn’t appeal Rowland’s dismissal of their claims against Samsung.
Judge David Hamilton wrote the opinion; Judges Ilana Rovner and Amy St. Eve concurred.
Hamilton said the panel couldn’t reach a resolution on the question of whether the Magnuson-Moss law applies to the Wares’ service contract because that law, although a federal statute, “has additional jurisdictional criteria” the couple failed to meet.
Among those criteria are that the amount in controversy has to exceed $50,000 and a class action has to have more than 100 named members. But the Wares named only themselves, and both parties agreed the federal district court lacked original subject-matter jurisdiction. Best Buy asked the appeals panel to remand the case for dismissal. But the Wares pushed the appellate judges to rule that the district court had either supplemental jurisdiction or jurisdiction under the Class Action Fairness Act .
The Wares said their state law claims would have met the threshold for amount on controversy based on aggregate damages, extending jurisdiction to the MMWA claims, but the Seventh Circuit panel said the law doesn’t allow for counting collective damages.
“The plaintiffs’ troubles with a four‐year‐old $3,000 television could not possibly leave more than $75,000 in controversy between them and Samsung,” Hamilton wrote. “Because the Wares have not met the amount‐in‐controversy requirement, we need not address whether diversity of citizenship existed.”
The panel also rejected the CAFA argument, noting that although jurisdiction can be established without 100 named plaintiffs, “the aggregated amount in controversy must exceed $5 million” and there must be at least one class member who resides in a different state from any defendant. Since the Wares didn’t bring the initial complaint under the CAFA or invoke that law “until their post‐argument memorandum on subject‐matter jurisdiction,” Hamilton wrote, their effort fails.
“Any inference that the amount in controversy exceeds $5 million would be entirely speculative,” Hamilton added. “The Wares have requested that if we find jurisdiction lacking, we vacate the district court’s opinion and judgment and remand for dismissal. We agree that is the right remedy.”
The Wares have been represented in the case by attorney Paul S. Rothstein, of Gainesville, Fla.